SunMoon trading suspended

Firm requests suspension as key shareholder addresses MAS queries over share transactions

A trading halt at SunMoon Food Company has been converted to a suspension as a key shareholder addresses queries over share transactions.

Yesterday, SunMoon announced it had been informed that the key shareholder, First Alverstone Capital, was "recently queried by" the Monetary Authority of Singapore (Market Control), and was currently in "consultations" with it.

First Alverstone Capital is a fund owned by SunMoon executive chairman Gary Loh and his wife, Ms Selena Cheng.

The queries related to changes in shareholdings by First Alverstone that took place on Sept 18. These were disclosed on Sept 21.

SunMoon added yesterday that Mr Loh and Ms Cheng, while addressing the queries from MAS, had "noted that there may be issues under the Singapore Code of Takeovers and Mergers". It added that they "voluntarily consulted with the Securities Industry Council on these issues" on Monday.

The queries centre on the change in stake on Sept 18 when First Alverstone almost doubled its stake from 17.48 per cent to 29.71 per cent. Mr Loh's fund had bought 60 million shares for an average price of about 10.9 cents each.

The fund had also sold 21 million SunMoon shares for an average price of about five cents per share. No reason was given for either of the transactions.

However, the average purchase price of each share - 10.9 cents - was significantly above the market price of SunMoon shares, which were trading at about 4.5 cents at that time.

On the same day, Sept 18, that First Alverstone bought the shares, six shareholders who had earlier put in a motion to remove Mr Loh from the board said they were withdrawing the proposal.

They had called for an extraordinary general meeting to vote on Mr Loh's removal without giving any reason.

However, the move to try and oust Mr Loh had also come after another First Alverstone share transfer on July 28.

In that transaction, First Alverstone transferred 60 million SunMoon shares - the same number that it bought recently - to individuals who were creditors of the firm in 2013. The shares were likely transferred to fulfil part of a loan settlement agreement reached around September 2013. That agreement was to settle SunMoon's remaining $24.4 million of legacy debt incurred in 2007.

Before the firm's statement, trading of SunMoon's shares had already stopped on Monday, when the company requested a trading halt. However, SunMoon requested for the halt to be converted to a voluntary suspension.

SunMoon said that it thought the ongoing "consultations" would create market speculation and a sense of uncertainty, and this would not be in the interests of the company and the shareholders.

Mr Loh declined to comment when contacted. Independent director Tan Eng Liang said he had been travelling and would be briefed on the suspension soon.

SunMoon shares last traded at 5.2 cents on Oct 5.

A version of this article appeared in the print edition of The Straits Times on October 16, 2015, with the headline 'SunMoon trading suspended'. Print Edition | Subscribe